
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62777-62778]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24632]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70623; File No. SR-BYX-2013-037]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Rule Change To Add a Reference 
to Rule 10C-1 Under the Exchange Act in the Exchange's Rules Concerning 
Unlisted Trading Privileges

October 8, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on October 3, 2013, BATS Y-Exchange, Inc. (the ``Exchange'' or 
``BYX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal add language to Rule 14.1, entitled 
``Unlisted Trading Privileges,'' that will make clear that the Exchange 
will not list equity securities without first ensuring that its rules 
comply with Rule 10C-1 under the Act (``Rule 10C-1'').\3\
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    \3\ 17 CFR 240.10C-1.
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    The text of the proposed rule change is available at the Exchange's 
Web site at http://www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to add language to Rule 14.1, which will 
clarify the fact that the Exchange will not list equity securities 
without first ensuring that Exchange Rules comply with Rule 10C-1, as 
described below.\4\
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    \4\ 17 CFR 240.10C-1.
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    On March 30, 2011, to implement Section 10C of the Act,\5\ as added 
by Section 952 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010 (``Dodd-Frank Act''),\6\ the Commission proposed 
Rule 10C-1 under the Act,\7\ which directs each national securities 
exchange to prohibit the listing of any equity security of any issuer, 
with certain exceptions, that does not comply with the rule's 
requirements regarding compensation committees of listed issuers and 
related requirements regarding compensation advisers. On June 20, 2012, 
the Commission adopted Rule 10C-1.\8\ Rule 10C-1 obligates the Exchange 
to establish listing standards that require each member of a listed 
issuer's compensation committee to be a member of the issuer's board 
and to be independent, as well as establish certain factors that an 
issuer must consider when evaluating the independence of a director.\9\ 
Rule 10C-1 also requires the Exchange to establish standards for 
evaluating the independence of a compensation consultant, legal 
counsel, or other adviser (``Compensation Consultant'') and requires a 
Company to provide funding to a compensation committee to retain such 
Compensation Consultant.\10\
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    \5\ 15 U.S.C. 78j-3.
    \6\ Public Law 111-203, 124 Stat. 1900 (2010).
    \7\ See Securities Act Release No. 9199, Securities Exchange Act 
Release No. 64149 (March 30, 2011), 76 FR 18966 (April 6, 2011) 
(``Rule 10C-1 Proposing Release'').
    \8\ See Securities Act Release No. 9330, Securities Exchange Act 
Release No. 67220 (June 20, 2012), 77 FR 38422 (June 27, 2012) 
(``Rule 10C-1 Adopting Release'').
    \9\ 17 CFR 240.10C-1.
    \10\ Id.
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    The Exchange does not currently list any securities as a primary 
listing market. Consistent with this fact, Exchange Rule 14.1 currently 
states that

[[Page 62778]]

all securities traded on the Exchange are traded pursuant to unlisted 
trading privileges and that the Exchange will not list any securities 
before first filing and obtaining Commission approval of rules that 
incorporate qualitative listing criteria and comply with Rule 10A-3 
under the Act.\11\ To make clear the Exchange's intention to comply 
with the requirements of Rule 10C-1, the Exchange proposes to amend 
Rule 14.1 to state that no equity securities will be listed on the 
Exchange until Exchange Rules have been amended to also comply with 
Rule 10C-1. Because the Exchange does not presently list any equity 
securities, the Exchange does not believe it is necessary to make any 
further amendments in response Section 952 of the Dodd-Frank Act at 
this time.
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    \11\ 17 CFR 240.10A-3.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\12\ Specifically, the 
proposal is consistent with Section 6(b)(5) of the Act,\13\ which 
requires exchange rules to promote just and equitable principles of 
trade, remove impediments to, and perfect the mechanism of, a free and 
open market and a national market system, and, in general, protect 
investors and the public interest. The Exchange believes the proposed 
rule change fulfills these requirements because it will add language to 
Rule 14.1 that clarifies the fact that the Exchange will not list 
equity securities without first ensuring that its rules comply with 
Rule 10C-1, which implements Section 10C of the Act.\14\
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78j-3.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    BYX believes the proposal is consistent with Section 6(b)(8) of the 
Act \15\ in that it does not impose any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The Exchange notes that the proposed rule change will merely clarify 
the fact that Exchange Rules must comply with Rule 10C-1 under the Act 
before any listing of equity securities on the Exchange becomes 
effective. Thus, the rule change will not impose any burden on 
intermarket or intramarket competition.
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    \15\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-
4(f)(6)(iii) thereunder.\17\
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BYX-2013-037 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BYX-2013-037. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549-1090, on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-BYX-
2013-037, and should be submitted on or before November 12, 2013

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24632 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P


